Bessent Confident in BOJ Chief Ueda Amid Rate Hike Speculation

U.S. Treasury Secretary Scott Bessent expressed confidence in Bank of Japan Governor Kazuo Ueda, stating he believes Ueda will make decisions best for Japan's economy. In an interview with NHK, Bessent attributed part of Japan's recent inflation to a weak yen and rising energy prices. He predicted that as energy costs decrease and the yen stabilizes, inflation will ease, leading to a positive economic cycle for Japan.

The remarks come ahead of the BOJ's policy meeting on September 17 and 18, where a potential interest rate hike is expected. Bessent had previously called for higher Japanese rates and is set to meet Ueda at a G20 finance leaders' meeting at the end of August. The joint yen-buying intervention by Japan and the United States last week aimed to prevent further currency weakness and its impact on Asian markets.

In a separate interview with Japan's Nikkei newspaper, Bessent highlighted the interconnectedness of Asian currencies with the yen. He noted that the weak yen has contributed to the weakness of the Korean won and influenced China's currency policies. Bessent also reiterated his confidence in Ueda, whom he has known for 15 years, describing him as market-savvy.